Exit Alternative to IPO: Acquisition

The goal of venture capitalists is to make a 10x return over the length of an investment, generally the 6-7 years it takes a company to “exit” by going public. For some, they can achieve similar results through different means--specifically, M&A.

Brex, the B2B corporate credit card company, recently purchased a Y Combinator grad startup, Pry Financials, for $90MM. The 10-person startup had been working off of its $4.2MM seed round raised just last year. Not too shabby for a small team three years into the perilous startup journey. For Pry Financials, the winning formula was their overlapping customer list with Brex, but selling an entirely different product.

Occasionally, the opposite happens. A private equity firm takes a company that has gone public back to private through a purchase deal. This situation just happened with cybersecurity company Sailpoint, which will be taken private by PE firm Thoma Bravo in a $6.9BN deal.